"Retirees Now Frequently Base Their Retirement Decisions on the Portfolio Success Rates Found in Research Such as the Trinity Study.... This Is Not the Information They Need for Making Their Withdrawal Rate Decisions."

"Big Moves Out of Stocks Should Not Be Done at All. But Strategic Asset Allocation Can Be Done At Very Rare Times, Maybe Six Times in an Investor’s Lifetime, Three Times When the Market Is Stupidly High and Three Times When Stupidly Low."

"There Is An Extensive Literature About the Predictability of Long-Term Stock Returns. There Is an Extensive Literature About Short-Term Market Timing. My Question Is About Long-Term Market Timing. The Literature Seems Slim."

"For Years, the Investment Industry Has Tried to Scare Clients Into Staying Fully Invested in the Stock Market at All Times, No Matter How High Stocks Go. It's Hooey. They're Leaving Out More Than Half the Story."

"There Are Time-Periods Where Stocks Are a Terrible Addition to That Portfolio. Yet Inexplicably, We As Planners STILL tend to Suggest That It Is 'Risky' to Not Own Stocks When in Reality the Only Risk Is to Our Business."

"There Is a Growing Behavioral Economics Movement, But It So Far Has Had Limited Impact. Economists Are Not Fond of the Softness and Imprecision of Psychology. These Notions Are Considered Vaguely Unprofessional and Flaky."

"I Was Hooked on the Idea of [Passive] Index Indexing, But Something Inside Made Me Wonder "Too Good to Be True?" and "What's the Downside?" I Happened on to Your Site and Valuation-Informed Indexing Seems to Make Sense."

"Rob's Da Man! Never in the History of the Diehards Forum Has One Poster, Always Making Civil and Well Thought-Out Posts, Managed to Irritate So Many Without Anyone Being Able to Articulate a Good Reason As to Why."

"Rob Bennett: Some People Disagree With Him, and He Rubs a Lot of People the Wrong Way. But He Has Interesting Ideas About Valuation-Informed Indexing, and He Delves Into a Lot of What Makes a Successful Investing Strategy."

"The Return Predictor Is Based upon the Principle that Over the Long Term, Stock Market Prices Will Reflect the Ten-Years Earnings Growth of the Underlying Companies. Prices Return to a Common Growth Pattern."

"You Go About It in a Manner that is Catastrophically Unproductive by Adding Missionary Zeal that Inflates Your Importance and Demeans Others. The Whole Idea That There is a New School of Safe Withdrawal Rates Reeks of Personal Aggrandizement."

“What Warren Buffett Did Was Essentially Quite Close to What Rob Bennett Has Written. Buffett Has in Fact Been Cleverly Incorporating Long-Term Market Timing Based on Valuation of the Market in His Allocation of Money to Stocks.”

"You've Got to Say One Thing for Rob. He Has NEVER Lowered Himself to Ad Hominen Attacks -- Subliminal or Otherwise -- on Any Other Person on This Board. Not Once. Ever. At Least Give Him Credit for That."

"Mr. Bennett, You Are Spot on About Integrating Some Type of Valuation Filter to One's Stock Allocation. Astute Investors Have Incorporated Some Type of 'Valuation Timing' Into Their Investment Decisions Since the Beginning of Time."

"There Is Nothing More Doubtful of Success Than a New System. The Initiator Has the Enmity of All Who Profit By Preservation of the Old Institution and Merely Lukewarm Defenders in Those Who Gain By the New One."

"Difficult Subjects Can Be Explained to the Most Slow-Witted Man If He Has Not Formed Any Idea of Them. But the Simplest Thing Cannot Be Made Clear to the Most Intelligent Man If He Believes He Knows Already What Is Laid Before Him."

"I Certainly Have Seen the Academic Profession Squelching Unfashionable ideas and Have Often Been on the Wrong Side of It. Kuhn Shows How Most Pathbreaking Scientific Ideas Are Rejected at First, Usually for Decades.”

"Rob Bennett Was an Early Pioneer in 3rd Generation Modeling by Advocating (Through Various Online Forums) that Withdrawal Rates Must Be Adjusted for Market Valuations Consistent with Research by Campbell and Shiller."

"Rob Is an Enigma in the Personal Finance World. He Has Interesting Theories on Investing Based on Market Valuations. But He Weaves a Tale Which Makes the Stories of Alexander Litvinenko & Gareth Williams Seem Tame by Comparison."

"I Have Read Everything I Can About Valuation-Informed Indexing. Buy-and-Hold Is Extremely Problematic. I Respect the Passion, Hard Work and Research That You Have Put Into This Very Important Issue. Your Work Has Huge Value."

"The Amount of Return You Can Expect From a Diversified Equity Portfolio Is Inversely Correlated to the Market Valuation at the Start of the Holding Period. It Is One of the Most Robust Statistical Relationships in Modern Finance."

"I've Had Similar Experiences. I Know of Two Young Professors Who Wanted to Do Research on Fundamental Index and Reported to Me That Their Colleagues Advised Them That This Line of Research Could Derail Their Career Prospects."

"As with Drug Studies Funded by Drug Companies, It Would Be Churlish to Suppose that the Chicago School of Business Was in the Bag. But It Would Also Be Idealistic to Assume That There Was No Funding Bias at All."

"This Sort of Intimidation Is Not Acceptable. The Cigarette and Pharmaceutical Industries Found Research Supporting Their Products By Funding It. But That Was Big Money Supporting Outcomes, Not Dissuading Others."

"The Situation [Referring to the Intimidation Tactics Used to Silence Academic Researcher Wade Pfau's Reporting of the Dangers of Buy-and-Hold Investing Strategies] Seems Well Below Any Professional and Academic Acceptable Standards."

"It Is Obvious that Rob, in Attempting to Identify New Safe Withdrawal Rate Strategies...Is Goring Your Ox. If Rob Improves on [the] Safe Withdrawal Rate Methodology, the Implication Is Clear: You Are All, Metaphorically, Out of Business."

"Naturally, I Am Finding That Valuation-Informed Indexing Can Allow You to Reach a Wealth Target With a Lower Saving Rate and to Use a Higher Withdrawal Rate in Retirement Than You Could With a Fixed Allocation."

"A Careful Examination of Past Returns Can Establish Some Probabilities About the Prospective Parameters of Return, Offering Intelligent Investors a Basis for Rational Expectations About Future Returns."

"How Can It Be That One-Year Returns Are So Apparantly Random and Yet Ten-Year Returns Are Mostly Forecastable? In Looking at One-Year Returns, One Sees a Lot of Noise. But Over Longer Time Intervals the Noise Effectively Averages Out and Is Less Important."

"The Notion That Rich Valuations Will Not Be Followed By Sub-Par Long-Term Returns Is a Speculative Idea That Runs Counter to All Historical Evidence. It Is an Iron Law of Finance That Valuations Drive Long-Term Returns."

"It's January and the Temperature Is Below Freezing. If You Asked Me Whether It Will be Warmer or Cooler Next Tuesday, I Would Be Unable to Say. However, If You Asked Me What Temperature to Expect on April 9, I Could Predict "Warmer Than Today" and Almost Surely Be Right."

"If the Response Is "Who Knew?", It Won't Be Much Comfort for Retirees in the Employment Line at Wal-Mart. This is Especially True Since a Rational Understanding of History and the Drivers of Longer-Term Stock Returns Can Help Retirees To Avoid That Surprise."

"New of the Demise of the Random Walk Has Only Very Slowly Spread, In Part Because Its Overthrow Came as a Shock. If the Random Walk Hypothesis Were Correct, the Most Likely Return Would Be the Historic Average Return. The Evidence, However, Is Strongly Against This."

"I Don't Care If You Do or Don't Believe That the Market Will Behave Similarly in the Future As It Has in the Past. Either Way, This [The Stock-Return Predictor] Is an Excellent Way to Understand What the Market Has Done In the Past."

"It Really Is a Shame and Indefensible That So Many Feel the Need to Jump Into It With No Interest of Posting on the Topic But Just to Disrupt. Are You That Insecure? Some on the Forum Have an Interest in This Topic. If You Don't, Stay Out!"

"Irrational Behavior Does Follow Patterns. But How Many Experts in Behavioral Finance Believe That Such Knowledge Can Be Used to Predict Markets? Basically, None. Your Model Cannot Attain the Level of Predictive Value You Claim."

"The Safe Withdrawal Rate Studies Are Based on History. This [The Retirement Risk Evaluator] Shows, Based on the Same History, What the Probabilities Are for the Future at Various Starting Points. If the First Has Value, Then Surely This Does Too."

"There Are Hundreds of People Who Contributed to This. This Calculator [The Stock-Return Predictor] Demonstrates in a Compelling Way the Power of This New Internet Discussion-Board Communications Medium."

"A P/E10 of'26' Is Bad. Now Look at the 30-Year Return Predicted by the Calculator -- 5.4 Percent Real. That's Not Bad. There Are All Sorts of Strategic Implications That Follow From Understanding That Stocks Provide Different Sorts of Returns Over Different Sorts of Time-Periods."

"I Would Never Invest in Anything Without Having Any Idea What the Expected Return Is. For Instance, I Would Not Walk Into a Bank And Say "I'll Take One Certificate of Deposit, Please" WIthout Asking What Rate They Are Offering."

"I've Seen Things Said on Investing Boards That I Have Never Heard Said in Discussions of Any Non-Investing Topic. The Question of Whether Valuations Affect Long-Term Returns Is a Topic That Causes People More Emotional Angst Than Does Abortion or Impeachment Proceedings or the War in Iraq."

"It's Not Possible For Those Who Have Come to Believe That Stocks Are Always Best to Accept that Valuations Matter. The Two Beliefs Are Mutually Exclusive. If Valuations Matter, There Is Obviously Some Valuation Level At Which Stocks Are Not Best. The Two Paradigms Cannot Be Reconciled."

"Dear Rob -- I Just Became Aware of Your Past Research in September. Since Then, I've Read Archives From Many Discussion Boards and Websites, and I Always Find Your Writing to Be Very Interesting and Intriguing."

"I Think Rob Bennett Did Provide An Important Contribution in Terms of Describing a Way for P/E10 to Guide Asset Allocation for Long-Term Conservative Investors. I Also Think He Was Right on the Issue of Safe Withdrawal Rates."

"Because the Precise Timing of This Mean Reversion Is Not Known in Advance, Expecting the Result to Happen in the Short-Term Will Not Be Possible. But Long-Term Investors Who Can Be Patient Can Wait for This Mean Reversion and Will Eventually Come Out Ahead."

"Your Work Is at Odds with the Ethos of the Board -- Here the Theme is John Bogle's Philosophy, Which Eschews Market Timing. This Board Came Into Existence to ESCAPE One Individual, the Very Individual With Whom You Have Openly Aligned Yourself."

"Why Is It Such an Odious Violation of the Tenets of Bogleheadism to Explore Whether Someone Who Has Enough Patience Might Be Able to Benefit from the Transitory Nature of Speculative Returns (the Idea That the P/E Ratio Eventually Ends Up Where It Started)?"

"Let Me Explain Why I Posted About This Here. Valuation-Informed Indexing Has Had Critics for Years. But Until Norbert Did It In 2008, Nobody Seemed to Have Provided a Serious Investigation of It. I Couldn't Understand Why. That Bothered Me."

"If You Really Don't Like Market Timing in Any and All Forms, You May Not See Any Point in an Empirical Investigation. You View Me as One of a Long Line of Hucksters Trying to Sell You Some Snake Oil. I Don't Want to Be Such a Person."

"Having a Completely Ineleastic Demand for Equities Is a Bit Bonkers. No One Acts That Way with Life's Other Important Commodities. Campbell Advocates a Linear Valuations-Based Strategy so That You Wouldn't Be Making Big Changes. This Would Be Like Rebalancing But More Flexible."

"The Whole Idea of Valuation-Informed Indexing Belongs to You. Do You Mind if I call the Paper 'Valuation-Informed Indexing'? I Would Give You Credit. I Have Been Toying With the Idea of Sending the Paper to the Journal of Finance, Which Is the Most Prestigious Journal in Academic Finance."

"I Definitely Need to Cite You as the Founder of Valuation-Informed Indexing, As I Have Not Found Anyone Else Who Can Lay Claim to That. Shiller Pointed Out the Predictive Power of P/E10 But Never Discussed How to Incorporate It Into Asset Allocation, As Far As I Know."

"I Tested a Wide Variety of Assumptions About Asset Allocation, Valuation-Based Decision Rules, Whether the Period Is 10, 20, 30 or 40 Years, and Lump-Sum vs. Dollar-Cost Averaging To Show That the Results Are Quite Robust to Changes In Any of These Assumptions."

"I Wrote Up the Programs to Test Your Valuation-Informed Indexing Strategies Against Buy-and-Hold and I Am Quite Excited. You Say in the RobCast That VII Should Beat Buy-and-Hold About 90 Percent of the Time. I Am Getting Results That Support This."

"Never Underestimate the Power of a Dominant Academic Idea to Choke Off Competing Ideas, and Never Underestimate the Unwillingness of Academics to Change Their Views in the Face of Evidence. They Have Decades of Their Research and Academic Standing to Defend."

"Since They Did Not Diagnose the Disease, There Is Little Popular Confidence That They Know the Cure. What If Economics Is, Actually, At the Same Level as Medicine Was When Doctors Still Believed in the Application of Leeches?"

"I Love the Humans Dearly (the Title of the Book I Am Writing Is Investing for Humans: How to Get What Works on Paper to Work in Real Life) But They Can Be a Trial at Times. Hey! Helping the Humans Learn What It Takes to Invest Effectively Is Not All That Different From Being Married!

"Wow, I Did Not Realize You Had Achieved This Much Success and Had Many Devoted Believers/Followers. That’s Great, Then Ignore the Opposition. It Is Great to Have Opposition: That Means You Are Doing Something Right."

"I Do NOT Believe I Know It All. I Believe That Shiller Discovered Something Very Important and It Appalls Me That More People Are Not Exploring the Implications of His Findings. My Aim Is To Launch a National Debate."

"I LOVE Everything About Buy-and-Hold Other Than the Failure to Encourage Investors to Take Price Into Consideration When Setting Their Stock Allocations. That's a Mistake That Was Made Because Shiller’s Research Was Not Available at the Time The Strategy Was Being Developed."

"Valuation-Informed Indexing Sounds Like a Real Thing. If It Is and I Can Thoroughly Understand It, Then It Will End Up In My Classrooms and in My Students' Minds (Of Course, With References to You and Wade)."

"As a Fan of Thomas Kuhn's The Structure of Scientific Revolutions, I Know That Progress Can Be Frustratingly Slow and What Is Typically Needed Is Either a Crisis or the Ascent of a New Generation of Scientists Who Did Not Build Their Careers on the Old Models and Theories."

"Rob Gets Himself So Worked Up Over What Someone Else Is Doing With Their Own Money and Not Bothering Rob in the Least. As Long As They Aren't Knocking on Your Basement Door, What Do You Care? They Are Happy and Content. Leave Well Enough Alone and Focus on Your Own Account."

"I've Been on Forum Since the BBS Days and I Think Rob is Special. He Could Be an Internet Meme If He Put Some Effort Into It. Someday, He Will Realize That the Only Thing He's Good At Is Being an Epic Loser. He Just Needs to Embrace That Idea and Run With It. Watch Out, LOLCats, Here Comes Pathetic Guy!"

"You Guys [the Greaney Goons] Are the Same Jokers Who Have Done This Before, Sparring with Rob Over Nonsensical Issues On This Site and Others, Leveling Personal Attacks, and You Don't Even Use Real Names! Rob Is Entitled to His Opinion, But the Fact That You Challenge Every Jot and Tittle of What He Says Makes It Clear You Have An Unholy Agenda. Please Take It Elsehwere."

"Rob, Take This As Friendly Advice. You're a Smart and Articulate Guy and You Could Be Making Valuable Contributions to This Discussion. I've Dealt with the Mentally Ill Before and I've Found That They Sometimes Can Be Reasonable If Gently Redirected."

"I’m a Numbers Guy. And I Believe I Understand Rob’s Thesis, that Future Returns, Over the Next Decade, Have a Tight Inverse Correlation to the PE10 for the Starting Point. Remember, Correlation Doesn’t Need to be 100%, Only That There’s a Bell Curve of Potential Outcomes that Shift Meaningfully Based on the Input."

"I Have had Academic Researchers Tell Me That They Dream of the Day When They Will be Able to do Honest Research Once Again. I Have had Investment Advisors Tell me That They Dream of the Day When They Will be Able to Give Honest Investing Advice Again."

"Let’s Call a Spade a Spade, Shall We? Wade Pfau Stole Your Research and Put His Name on it, Throwing You Just a Tiny Crumb of Acknowledgement to Ward Off a Lawsuit. He’s Profiting Handsomely By His Theft, Leading a Charmed Life, Widely Published, Widely Respected. While Rob Bennett Continues to Toil in Total Obscurity. It’s So Incredibly Unfair, I Think If It Happened to Me, It Could Actually Drive Me Insane."

The Delete Button

It’s a good one. This is a smart fellow and a kind fellow. He helps people. To take a look at the blog makes you feel hopeful about things.

The day on which he learned about Passive Investing was like the day the devil held the apple out to Eve. “What could be wrong in the idea of an efficient market? There’s a voice in my head that tells me that this is a tree that will bear bad fruit. But that’s nonsense! I’m good. I want the apple. The apple must be good. The market is made up of lots of people like me. We’re all good. We all want apples. All apples are good. All else is myth.”

It tasted good. So he was right!

Those people who got sick, it wasn’t the apples that did that. That was the economy. The economy can be bad, but not apples. He picked the apple. He’s good. How could the apple possibly have been bad?

The thread was called “Problems with the Conventional Investing Advice.” I posted the thread-starter. The forum is called “MoneyBlogNetwork.com”. Bloggers go there to learn how to set things up, or to hear what readers are getting excited about nowadays, or to share tips on bringing in some money, that sort of thing. It’s not a place to talk about snakes bearing apples! Only Rob Bennett would think it proper to mention the snakes!

The thread-starter generated lots of discussion. I said that I would be happy to write some guest blog posts telling the truth about stock investing (as if we all didn’t all already know somewhere within that the apple incident has not been entirely forgotten by, well, you know — Him!). Eight bloggers said they would be happy to look at some words from me. There were lots of good questions. Respectful and warm. An encouraging sign to eyes that have seen so many of the other kind over the past seven years.

The sense you got was that we are past most of the denial and anger and are now in the bargaining stage, with some at least entertaining thoughts of giving in to depression. Which suggests that the good stuff that comes with acceptance might not be all so terribly far off anymore. But that comes from a fellow who has been seeing the glass as half full for a long time now. You need to subtract credibility points for that.

The most instructional line was one posted by “Four Pillars”. He asked what exactly it was about the Old School safe-withdrawal-rate studies that bugged me so much. I told about the hundreds of my friends from the Motley Fool board suffering busted retirements because they believed the lies (intentional or not) posted there by their other friends. “Is this a problem or is this not a problem?” I wondered. “It’s hard to say,” Four Pillars responded.

He’s right, you know. It’s easy to know that it’s a problem, to be sure. But it is indeed darn hard to say it. Saying it hurts. Because when you say it, people hear it. And hearing it certainly hurts. Most of us don’t get kicks out of hurting our friends. There’s an important sense in which it makes all the sense in the world to ban honest posting on safe withdrawal rates and other valuation-related investing topics.

This brings us back to the apple business. To say out loud the truth about stock investing is to let people know that eating the apple wasn’t so hot an idea. The “experts” did this to us. We did this to us. Our friends did this to us (and we did this to our friends). The good people! We’re pointing out flaws in the good people now! We’re hurting each other!

Can we talk about the Sharpe ratio? There’s something about the Sharpe ratio that I have never entirely understood. I believe that the key to getting out of this economic crisis is coming to a better and more complete understanding of the Sharpe ratio. I’m sure of it!

A report was filed Saturday night at Goon Central. A post soon went up suggesting that the Personal Finance Bloggers of the World should turn their attention back to The Sharpe Ratio and quick-like. It was a forceful suggestion. You’ve seen this sort of thing before. You know.

Sunday morning comes and there’s no thread. It went “poof!” Oh my!

I remembered that Graham Parker once wrote a song about things that happen on Saturday night and I googled the lyrics for clues. “It must have been murder, this wasn’t no accident.” I pondered these words in my heart.

I wrote an e-mail to JLP.

He responded with four words. This apple business is potentially a big story. You measure your words.

“I deleted the thread.”

That kinda sorta explains things. But this is a murder inquiry. We need to know more.

“Because it had turned into a mudslinging thread.”

We’re in the journalism biz. We still need to know more. “Why didn’t you delete the two mudslinging posts and leave the dozens of wonderful ones up for people to learn from?”

A quick conversation with the lawyers (this is a joke — I hope!). And then this: “”It was easier to delete the whole thread (one-click) than to weed through the posts that I thought were pointless.”

Bloggers! They’re humans too! I’ve long suspected as much.

I tried this: “Do you have any objection if I start a thread at the forum asking other bloggers in the community what they think of your policy of deleting an entire thread because one poster (both trash posts were put forward by the same individual, an individual who had never posted to the forum before and an individual who does not own a blog and an individual who has been posting abusively in numerous forums for years) posted abusively on it?”

No response to that one.

An apple. All this fuss over an apple. It’s so unfair!

The forum is still there. The blogs are all still there. The Old School studies are all still there. The busted retirements are all still there. The books recommending Passive Investing are all still there.

It’s almost as if nothing ever happened.

Wouldn’t it be cool if there were a button on your computer that you could push and it would make it so that nothing that we ever said or did during The Passive Investing Era had ever happened?

Comments

I do not understand the fixation with the Sharpe Ratio myself outside of an Efficient Market Hypothesis context.

It claims to be a measure of gain versus risk. It is actually a measure of gain versus volatility. Unless investment gains increase as you increase risk, it is meaningless. Guess what? Quite often, you can increase investment returns while decreasing risk. Think of the top of the bubble and the alternative of investing in TIPS.

Hidden in the background during discussions of the Sharpe Ratio is the time frame. It is usually quite short. It excludes effects that take a while to surface such as mean reversion.

That one is particularly embarrassing because I sent a link to the blog entry to JLP and we had a little discussion of it between ourselves. I doubt that it made a big difference but, if I had it to take back, I sure would have preferred to have gotten the fellow’s name right.

The Buy-and-Holders are not taking this well, are they?
The thread is here.
Kinda, Sorta Juicy Excerpt #1: Those ridiculous pictures on the right make it hard to follow!
Kinda, Sorta Juicy Excerpt #2: You've stumbled across Rob "Hocus" Bennett's site. This forum was created in large part to get away from his takeover of the old Vanguard Diehards' forum at Morningstar.com.
Kinda, Sorta Juicy Excerpt #3: There's an entry about him at urbandictionary, if that tells you…

I have notified the Purcellville police that I may be the target of SWAT-ing attacks by the internet goons who have advanced posts at various investing discussion boards and blogs in "defense" of Mel Lindauer and John Greaney, the two individuals who have led the 10-year-long Campaign of Terror against the Retire Early and Indexing discussion board communities and the Personal Finance Blogosphere.
Wikipedia defines SWAT-ing (or Swatting) as "an attempt to trick an emergency service (such as…

I reported in an earlier blog entry that I have asked the author of the Pop Economics blog if he would like to post a Guest Blog Entry responding to his (well-argued and fair) blog entry making the case for Buy-and-Hold over Valuation-Informed Indexing. Pop said "yes" and I sent a few words his way. Set forth below is his response to receipt of the Guest Blog Entry (I will post my reply as Monday's blog entry):
Hi Rob,
Thanks for e-mailing. I was remiss in not responding sooner.
There…

Set forth below are the text of some words that I recently posted to the Goon Central board re me efforts to send out 1,000 e-mails letting people know about the Wade Pfau Story:
this very unhealthy turn, of calculated and purposeful escalation of annoyance-on-purpose Providing notice of a coming hurricane drags people down, Drip Guy.
Are the people who tell people in an area about to be hit meanies because they do so?
Most people don't want to hear this message. I get that…

Set forth below are some words that Arty put to the comments section of a blog entry from last week:
Hi, Dripguy,
To the Rob quote you mentioned, above, I do agree, as would Shiller and many, that extreme far-right valuations represent “dangerous road conditions”. And I’d add that this might apply not just to “buy and holders”.
Every year I have some intermittent discussions with Rob, usually around holidays or when I am of from work. I do understand he is quite enthusiastic…

Arty posted two important comments to yesterday's blog entry on my e-mail correspondence with Academic Researcher Wade Pfau. The texts of these two comments are set forth below.
Arty Comment #1:
The report is correct about start and end points mattering. After all, we know that this matters in any single regression, but especially in comparative strategy regressions, even if using only a single asset class for the “stocks”. It muddies further if using some slice/dice model. But this…

I've added an addendum to my Google Knol entitled "Why Buy-and-Hold Investing Can Never Work" providing a link to a recent thread at the Get Rich Slowly forum discussing the arguments advanced in the Knol.
Juicy Excerpt #1: Alex Frakt, the admin of Bogleheads, called him "The most infamous troll in the history of investing forums on the internet." His storied past goes way back to many prominent forums, including Bogleheads, Morningstar, Early retirement, and Motley Fool. Some say he was…

I recently engaged in a good back-and-forth with the owner of the Monevator blog both on substantive and procedural matters relating to my effort to open the internet to honest posting on the flaws of the Passive Investing model and to replace that model with the Rational Model of understanding how stock investing works.
Juicy Excerpt #1: We don’t need to simulate brain chemistry to build a Behavorial Finance model. The human emotions evidence themselves in a quantifiable way in both…

The owner of the Monevator blog yesterday banned honest posting on the flaws of the Buy-and-Hold Model.
I put a comment to a blog entry there entitled U.S. Historical Asset Class Returns. Here are the words of my comment:
"Stocks tend to outpace other asset classes over the medium to long-term, but if you buy them at the end of a bubble period such as 1999 or 1929, you’re unlikely to do very well.
"Precisely so!
"The obvious question is -- Why do the "experts" not tell people this…

It was a post of mine applauding "Raddr" for his outstanding safe-withdrawal-rate research that led to formation of the FIRE board at the NoFeeBoards.com site. Among financial contributors to the site, I rank second for the size of my lifetime contribution. I was the founder of the most successful board in the site's history, the Safe Withdrawal Rate Research Group board.
So it pained me a bit to hear Sunday morning that ES, the site owner, is shutting down the shop.
The other side of the…

Set forth below is the text of a comment that I recently put to a discussion of a blog entry at this site:
It doesn’t matter, even if you are right. Not one bit. Because everyone thinks you are a complete ass and you will be long forgotten when someone actually does anything semi-productive with the vague notions you have been spewing for 10+ years.
You’re wrong, What.
You pretend to think I am an ass. You are in a tiny minority. When I go to the Financial Bloggers Conferences, I…

I participated in a discussion of how marketing considerations affect what we hear about the investing realities at the Oblivious Investor blog yesterday.
Juicy Excerpt: It is fine for blog owners to use their blogs to market their books. But there has to be honesty. If we are going to hear about academic research, we need to hear about all the academic research. We need to rely on community members other than the blog owner to fill us in on what the blog owner does not want to talk…

Ken Evoy, the owner of the SiteSell.com site, put a post to Facebook on August 18 titled Proof That Google Has No True Googlebomb Algorithm. The post describes a defamatory and malicious effort to do harm to the SiteSell business through use of the internet.
I posted a comment supporting Evoy in his efforts and describing the nine-year Campaign of Terror against the Retire Early and Indexing discussion-board communities led by those posting in "defense" of the Old School safe withdrawal rate…

Set forth below is the text of a comment that I recently put to the Goon Central board:
There's just nothing of value to be learned in a circular argument You are pointing at any important truth with these words. It IS a circular argument.
If the market is efficient, everything you say is so.
If valuations affect long-term returns, everything I say is so.
The pre-1981 research supports the idea that the market is efficient. The post-1981 research supports the idea that…

Yesterday's blog entry reported on an e-mail that I sent to Academic Researcher Wade Pfau on March 21, 2011. Wade's next e-mail arrived on March 28, 2011.
Wade offered his assessment of the Returns Sequence Reality Checker in this e-mail.
I had asked if the concept made sense. He said: "Yes, indeed. You are making a good point with the spreadsheet."
We exchanged a number of e-mails relating to technical points re the building of the calclualtor.
On April 5, 2011, Wade sent me an…

Set forth below is the text of a post that I recently put to the Goon Central board:
where you're wrong lies in your belief you have some "right" to post your Bat$hit Crazy hocomania opinions anywhere you please on the Internet. I have the right to post honestly.
Wade has the right to publish honestzzz research.
Every American citizen has the right to tell his friends and neighbors and co-workers and fellow community members what they need to know to stop the Wall Street Con Men…

While I was looking through my old e-mails to recover the ones that I sent to the Morningstar site administrators and reported on in the last few blog entries, I came across the e-mails that I sent to sign up to attend the Vanguard Diehards Conference with John Bogle in 2007. I had intended to ask Bogle questions about the cover-up of the errors in the Old School safe-withdrawal-rate studies, which I had reported on at a Motley Fool discussion board on May 13, 2002, and which have not been…

Thursday's blog entry set forth the text of a recent comment to the blog put forward by the author of the Financial Samurai blog. Set forth below is the text of a follow-up comment by Sam and then a response to the follow-up response by me.
Rob, you’re welcome to say whatever you want, and choose to be affected or not be affected by words.
There is a chance there is a reason why you have frequent debates. Usually it’s never a one-sided fault. Takes both sides to move…

Here are some words that I put last week to the comments section of the blog entry titled "Rob Can Be Exhausting and Perhaps Does Not Recognize Well-Supported Contrary Views As Well As I Wish He Would":
“Alleged,” Azanon? Excuse me?
There are Post Archives. If you have any doubts, you can check.
My understanding is that you posted at the Early Retirement Forum. If that is so, then you were there in person to see for yourself.
Please do not insult my readers with use of the word…

Yesterday's blog entry reported on an e-mail that I received from a Morningstar site administrator on April 17, 2006. The e-mail read: "Please direct us to the specific posting where you were threatened with violence by another Morningstar poster. " Set forth below is my response, which was sent the following day. I will provide the text of my follow-up e-mail in tomorrow's blog.
MStar Casey:
I've never been threatened by any Morningstar poster.
I have been threatened with violence by…

I recently wrote a Guest Blog Entry for the Lazy Man and Money blog entitled "Passive Investing Is a Strategy for Extremists."
Juicy Excerpt: I say that it is the idea that we should not even consider the idea of making allocation changes in response to big price changes that is extremist. We all should have been debating the different possible options all along. Some might have argued for zero percent stock allocations at those price levels, others for 25 percent stock allocations, others…

Set forth below is the text of a comment that I recently posted to a discussion thread at this blog:
I have 140 wildly supportive comments posted (with links!) at the “People Are Talking” section of the site, Sparky. There is no other blogger on the face of Planet Internet who has even a fraction of the number of wildly enthusiastic endorsements that I have won for myself.
Tell me one other blogger who has his name in the Acknowledgments section of peer-reviewed academic research…

Set forth below is the text of a comment that I recently posted to a blog entry at this site:
Rob,
From what I have read and have also seen in MANY examples, you were banned due to your continued abrasive attitude as well as your refusal to answer direct questions as well as provide proof to back up your claims (such as threats). If you had been banned on one of two boards, one could say that maybe there was the possibility that someone overreacted in banning you. However, when you see…

Set forth below is the text of an e-mail that I sent on October 1, 2008 to Sergeant Kelly of the Purcellville, VA police force. I subsequently had several conversations with both Sergeant Kelly and with Special Agent Michael Jedfrey of the High Technology Crimes Unit of the Virginia Department of State Police.
Sgt. Kelly:
Here are some printouts of internet postings that show the campaign of harrassment and intimidation aimed at me as a result of my posting accurate information on what…

Earlier blog entries have described communications I have had with the author of the Pop Economics blog re a Guest Blog Entry that I wrote entitled Valuation-Informed Indexing Is Risk-Diminished Investing. On Wednesday night, Pop wrote to tell me that he has accepted the new version of the Guest Blog Entry (entitled "Buy-and-Hold Masks Investing Risk") for posting at his site. He has not made a firm decision on a publication date. Set forth below is the text of the e-mail that I sent to Pop…

I recently wrote a column on the Wall Street Journal article acknowledging that the Buy-and-Hold claim that long-term investors need not engage in market timing is a marketing gimmick aimed at making the "experts" rich at the expense of the millions of middle-class investors sure to be wiped out by following such a "strategy." I wrote a second column pointing out that few Buy-and-Holders have acknowledged the article or commented on it or debated it.
The blogger who writes the Free Money…

I recently initiated a thread at the Get Rich Slowly Forum at which we discussed how the reckless promotion of Buy-and-Hold Investing served as the primary cause of the economic crisis. Well, actually, that was just my take. Believe it or not, there were one or two community members who did not buy into this idea. Imagine!
Juicy Excerpt #1: Buy-and-Holders are going against the herd by being net sellers in bull markets and net buyers in bear markets. So how can they be blamed for the problem…

Set forth below is the text of a comment I put to a thread on Valuation-Informed Indexing at the My Personal Finance Journey site:
Bogleheads.org is just one of many personal finance discussion boards and blogs which have "uninvited" Mr. Bennett.
That's so.
But why?
I am the person who discovered the analytical errors in the Old School safe withdrawal rate studies.
So the first post that I put to the Vanguard Diehards board was met with a hostile response. And then there were…

This time The Little Stinkers have gone too far.
They are now directing their Smear Campaigns against Mary Poppins!
Here is a sampling of community comments put forward during recent discussions of The Poppins Matter:
JohnYaker: As far as John Greaney's article referenced in the original post, I found it cruelly mean-spirited.
Gregory: You're right, the article about Rob is very mean-spirited. It's too bad the author feels the need to do this sort of thing.
OUJohnNasr: That link…

I've posted comments at the Free Money Finance blog on a number of occasions, helping my fellow community members come to a better understanding of the errors in the Old School Safe Withdrawal Rate Studies and explaining in general why the discredited Passive Investing model for understanding how stocks work needs to be replaced with the Rational Model. Set forth below is the text of an e-mail that I received on June 18 from the owner of the blog:
"Rob --
"While I appreciate the fact that…

Katy Marquardt has written about the split-off of the Bogleheads community from the Vanguard Diehards community at her U.S. News and World Report blog.
Juicy Excerpt: Concludes Coleman: "The revamped Diehards.org is better organized, easier to navigate and much more intelligently moderated than the older version," he says. "It's becoming a true social networking site."
I put forward a comment filling in some of the background that Murray Coleman “overlooked” in his write-up at…

I've added an article entitled Internet Harassment by Defenders of the Conventional Retirement Studies to the "Banned at Motley Fool!" section of the site. The article sets forth the text of an e-mail that I sent to my congressman urging government action to deal with the problem of internet harassment and outlining the intimidation tactics that have been employed to block those seeking to engage in honest and informed discussions of the analytical errors of the Old School safe-withdrawal-rate…

Here's a wild thread about the decision of Our Lords and Masters at the Bogleheads Forum and their decision to ban Investor Junkie for life:
Banned for Life from Bogleheads Forum
Just keep repeating to yourself: "Buy-and-Hold is science! Buy-and-Hold is science! Buy-and-Hold is science!"
Juicy Excerpt #1: Opposing viewpoints are shunned – Perhaps this is the most damning issue. This isn’t the first time someone has been banned. In Rob Bennett’s case he was banned for no known…

Set forth below is a comment that I posted to the blog in response to a claim put forward by one of the Greaney Goons that Academic Researcher Wade Pfau no longer views me as his biggest booster alive on Planet Earth:
Do you think Wade would agree with your statement that you are “the biggest Wade Pfau booster alive on Planet Earth”?
In the days before the Goons threatened to destroy his career if he continued publishing honest research, I am 100 percent certain he would have agreed.…

Tom Drake, owner of the Canadian Finance Blog, yesterday put forward the following words in the discussion thread following my Guest Blog Entry titled The Five Big Benefits of Valuation-Informed Indexing:
Hi, thanks for the informed discussion. After reviewing some of this material I feel like I am missing something. The approach seems to jive with all the value based investing learning I have been engaged in; including Ben Graham, Jarislowsky, Kyle, Green, Motley Fool, Josh Peters,…

Jim Yih, owner of the Retire Happy blog and a regular contributor at the Canadian Finance Blog, joked about the Ban on Honest Posting in a comment he posted to this week's entry of my Investing: The New Rules column at the Death by 1,000 Papercuts site.
The column is titled How to Get Banned from 15 Internet Sites Without Even Trying and tells the story of the nine-year-long Campaign of Terror by Buy-and-Hold Dogmatics against the Retire Early and Indexing discussion-board communities in a…

The Greaney Goons have in recent weeks taken the Campaign of Terror that they have used to destroy numerous Retire Early/Indexing boards in recent years to the Blogosphere. Several blog authors have responded by shutting down the ability of constructive posters to offer their thoughts rather than by banning only the Goons from further participation in the discussions that blog readers with good intent are seeking to have amongst themselves. I think this is a mistake.
Mike, author of the…

The fellow's name is "JLP." He writes the All Financial Matters blog.
It's a good one. This is a smart fellow and a kind fellow. He helps people. To take a look at the blog makes you feel hopeful about things.
The day on which he learned about Passive Investing was like the day the devil held the apple out to Eve. "What could be wrong in the idea of an efficient market? There's a voice in my head that tells me that this is a tree that will bear bad fruit. But that's nonsense! I'm good. I…

Set forth below is the text of a post that was put to the Goon Central board by Norbert Schenkler (I apologize for the crude language, which I permit to appear here only because I think there would be a risk of me miscommunicating Norbert's point if I were to paraphrase it):
"Productive would be you lifting a finger to accomplish any of that vision. Unproductive would be a repetition of you spinning your wheels for another 8 years. Which will you choose?
"No. No, no no no. F**k you,…

Yesterday's blog entry reported on an e-mail that I sent to Morningstar.com site administrators on April 18, 2006, reporting on death threats advanced by John Greaney at an earlier time that were being used by Mel Lindauer, co-author of the book "The Bogleheads Guide to Investing" at that time to intimidate Vanguard Diehards community members into not posting honestly on the errors in the Old School safe-withdrawal-rate studies. Set forth below is the text of the response I received from…

Set forth below is the text of a comment that I recently put to the Goon Central board:
GW asks why it takes COURAGE to send e-mails when there is "nothing to lose."It takes courage because we humans are social beings. We do not like to be outcasts. We do not like to have people hate us. We do not like to have people yell at us. We want people to approve of us. We want people to like us. We want to see comments on our blogs. We want links to our sites. We want people hiring us. All…

Set forth below is the text of a comment that I put to an earlier discussion thread at this blog:
Another example of you misunderstanding what you read.
I don’t think so, Evidence.
Michael is trying to earn a living. Like Wade Pfau. Like Robert Shiller. Like Rob Arnott. Like lots of us.
The Wall Street Con Men have huge war chests they can put to use destroying people who tell the truth about stock investing. So the people who tell the story straight nearly always pull their…

Set forth below is the text of a post that I put yesterday to the Goon Central board:
NFS said something yesterday that has been bothering me. He referred to the statements that I have made than I intend to bring lawsuits against the internet predators who have posted in "defense" of Lindauer and Greaney and the web sites that have banned honestzzz posting as a "threat." I can see why someone would take it that way. But the word "threat" does not accurately describe the spirit in which I…

Friday's blog entry set forth the text of an e-mail that I recently received from the author of the Pop Economics blog. Set forth below is the text of my response, sent on March 16, 2010.
Pop sent me a reply to the words posted below, but asked that I not post it. I will post my response to his reply as tomorrow's blog entry.
Pop:
Thanks for your response.
I am fine with the idea of just writing a stand-alone Guest Blog Entry that is not structured as a response to your earlier…

Site Administrator Alex Frakt is doubling down on the Defamation/Intimidation/Deception strategy he has employed to block honest posting on the dangers of Buy-and-Hold Investing at the Bogleheads Forum in the wake of the posting of research by Wade Pfau, Associate Professor of Economics at the National Graduate Institute for Policy Studies in Tokyo, Japan, showing that Valuation-Informed Indexing beats Buy-and-Hold in 102 of the rolling 30-year periods while Buy-and-Hold did better in 8 of…

Set forth below is the text of a comment posted by the author of the Financial Samurai blog on the thread relating to the blog entry called "Right Now, Rob, You Are Your Own Worst Enemy in This Matter." Below that is the text of my response post.
Did you inform JD and Lazy man you were going to publish your private email exchanges? Hope so.
Finally, I’m glad people are helping you see the light Rob! It’s OK to be a little crazy and long winded sometimes. If you want to progress, you…

Set forth below is the text of a comment that I recently put to the Goon Central board:
The article re Wade Pfau makes the case re the dangers of Buy-and-Hold in an extremely powerful way.The case is so powerful that people cannot bear to hear it. Gary North is no Buy-and-Holder. But even Gary North could not bear to hear this message. This is a hard one to take.
When I send those e-mails, I hurt people's feelings and I cause people to hate me. It takes courage to do that.
That's why…

Yesterday's blog entry reported on an e-mail that I sent to Academic Researcher Wade Pfau on April 6, 2012. Wade responded a few hours later.
He said: "Thanks for sharing. And I'll keep plugging away at this. I'm not sure if you saw the news before, but I recently became the curriculum director for the Retirement Management Analyst designation, which focuses on the post retirement period. I was surprised to learn that CFPs don't learn about post retirement, and their curriculum…

I tell my boys that God never created two people exactly alike. We all share enough in common with lots of others to be able to have friends with us when we head off on our adventures and to have others understand why we love certain songs more than others and all that sort of thing. But we are all also unique. We all were put on Earth for some special purpose.
He doesn't tell us what it is though. We have to figure it out. It often is hard to do so. It often takes a lot of time and work. I…

Set forth below is the text of a comment that I recently put to a discussion of a blog entry posted at this site:
Rob, just do a quick search of your past interactions. In almost every thread, you try and dominate all conversations. Your posts make up 80% of the content. You rarely consider others comments unless it furthers your position or if you can use it to distort a conversation. I was reading through some old FMF posts the other night and noticed a thread that you jumped in on. Most…

One of my reports on my e-mail correspondence with Academic Researcher Wade Pfau described an e-mail to Wade in which I stated: "I put up a post describing Greaney’s tactics and Lindauer’s role of linking to Greaney’s board each time a new poster dared to post honestly." One of the Goons asked for a link to the post. I provided the link in the comments section of that blog entry.
The post appeared in a thread at the Morningstar.com site at which long-time community members were…

Set forth below is the text of a comment that I recently posted to the Goon Central board:
Another key is acting within the limits of the statute of limitations, i.e. one year in Virginia.This is an ongoing act of financial fraud, NFS.
There have been numerous articles in big-name publications picking up on my 2002 finding that the Old School safe withdrawal rate studies get the numbers wildly wrong.
That's of course a good thing in itself.
But there is an obvious oddity about…

Tar42 determined that the timing was right to test whether the rift between the Vanguard Diehards community and the Bogleheads.org community had grown wide enough to permit a lifting of the ban on honest posting on valuation-related topics at the Vanguard Diehards board.
Juicy Excerpt: It's always good to hear both sides of an issue, whether it be Taylor's books or a counter opinion such as this.
Petro firmly nixed the idea. The post is gone, but you can pick up the general drift by…

Yesterday's blog entry set forth the text of an e-mail that I sent to my friend "Pop," the author of the Pop Economics blog. Pop asked that I not post the text of his reply. Set forth below is the text of my response to Pop's reply, sent on March 16.
I will set forth the text of the initial Guest Blog Entry that I sent to Pop as tomorrow's blog entry. I submitted a new Guest Blog Entry in accord with Pop's suggestions on Saturday.
Pop:
Thanks for another thoughtful response.
I am…

Set forth below are some words posted yesterday by the owner of the Sustainable Personal Finance blog to a thread at the Canadian Finance Blog:
Tom,
My take, and I’ve experienced this in the past (example below) is that anyone who is adamantly offering an opposing opinion to what the masses believe/are-led-to-believe is “the enemy”. Proponents of buy-and-hold will use an excuse such as “you are cancerous to our community” instead of opening their minds to the possibility that…

Yesterday's blog entry set forth the text of a comment put to this blog by the author of the Financial Samurai blog. Set forth below is a follow-up comment that Sam put to a different blog entry thread, the thread relating to the blog entry called "We Don't Want to Know What Works, We Want to Hear What Makes Us Feel Good." Below that is the text of my response.
Sam:
How come I continue to not understand what the debate is about? Seems like nobody else can either, which is why there are no…

I've been sending out e-mails containing links to my article on The Wade Pfau Matter. While I was going through old e-mails to get names to whom to send some of the e-mails, I came across the name of a poster named "Retired at 48." Retired at 48 was a super-popular poster who was banned at the Bogleheads forum and then harassed at the Morningstar forum because he put up posts that caused many people to question Buy-and-Hold dogmatism. I exchanged several e-mails with him some time back about…

Yesterday's blog entry reported on an e-mail that I sent to the Morningstar.com site administrator on April 18, 2006, relating to abusive posting by Mel Linduaer (co-author of the book "The Bogleheads Guide to Investing"). I sent a follow-up e-mail later that day. I will report tomorrow on the response that I received from Morningstar.
Mstar Casey:
This is my second response to your e-mail. The earlier response supplied the background facts. This post provides links.
Here is a link to…

Set forth below is the text of a comment that I recently posted to the discussion thread for another blog entry at this site:
I am doubtful that combating political correctness with complete A-hole-ishness is going to yield positive results.
In the end the results will likely be about as positive as yours.
Either way the election goes we are going to be facing difficult circumstances, in my view. If Clinton wins, she is going to have a hard time leading millions of people who she says…

Alex Frakt, site administrator for the Bogleheads.org forum, acknowledged in a recent post to that forum that I was banned from posting there even though I never violated any of the site's posting rules. He said that I was banned because I represent a "threat to the community."
Frakt offered his comments on this thread. The post referring to me (I posted as "hocus" in that community) is the one put forward on January 13, 2011, at 4:14 pm. After saying that the norm in the community is to ban…

Set forth below is the text of a comment that I recently put to the Goon Central board:
Personally, if I was confident that I'd been wronged and could make $500 million in a lawsuit, I'd pay the lawyer! It works the other way around too, GW.
If the lawyers were as confident as I need them to be to be sure they can win the case, they would be happy to take it on contingency.
This is what changes with the next crash. After the next crash, what Buy-and-Hold has done to us is in…

I discussed the reaction I received to my investing ideas at the Financial Bloggers Conference in a recent comment put to the Goon Central board. The comment was advanced on a thread titled Tweets on Defamatory Content:
Say, Rob, did you notice that people tended to not go out of their way to include you in conversations - in fact, they tended to edge away?
No.
There is indeed discomfort about the investing issue. People don't say "I am going to write about that at my blog when I get…

I have never engaged in deliberate deception in my writings. There was a time, though, when I was afraid to be fully honest about what I knew about stocks.
I founded the Financial Freedom Community in December 1999 with a series of posts about the Passion Saving concept that for a time made the Retire Early discussion board at the Motley Fool site the most exciting board on the face of Planet Internet. John Greaney was the founder of that board, and I knew from the first time that I looked…

Tuesday's blog entry described the background of Morningstar.com's recent reaffirmation of its ban on honest posting on valuation-related topics at the Vanguard Diehards discussion board.
Here is the text of the e-mail sent to me on Monday morning by Morningstar Casey:
This is a notice that your post number 2745304, "Re: Believe it or not", was removed for violating the Morningstar Discuss area Terms of Use, specifically for being inflammatory.
Please see our Terms of Use…

Spokane Al speaks for many in a comment he put to my Beyond Buy-and-Hold column the other day. Here are his words:
"For me at least when you say stuff like “. . . is the most dangerous Get Rich Quick scheme ever concocted by the human mind” I lose interest. I am willing to read and consider when one conducts reasonable discussions on a subject. I think that your outlandish statements create a giant chasm that regular people view as just another infomercial, over the top claim. They…

Set forth below is the text of a comment that I recently posted to the discussion thread for another blog entry at this site: Yes, I get that you are now 100% fixated on punishing me, rather than pursuing your own goals. If Wade’s paper gets written up in the New York Times, he gets all the glory and rewards. The first step is getting recognized experts like Bengen to acknowledge that he was the first. And that step is checked off. Of course, Wade could wave his hands and say “Shucks no, all this glory belongs to Rob Bennett. He’s the real brains behind any CAPE-based timing strategy.” Yes, that’s the ticket. That’s what will happen. Or you could take two minutes right now to set Bengen straight. Nope, you said that’s not an option. Anytime that anyone writes honestly about what the last 36 years of peer-reviewed research teaches us all about how stock investing works, it benefits each and every one of us who is trying to do the same. There is no limit on the credit that can be handed out. Millions of investors need access to accurate information. Thousands of investment advisers want to give it to them. The thing that is standing in their way is a Wall of Ignorance. People cannot believe the realities — that we now know of a way to invest in stocks that is far less risky and that allows people to retire far earlier in life — because they just sound too good to be true. Anyone who does anything to knock down that wall is helping all of us in a big way. Say that Wade does as you say. I am not saying that I think he would — I do not. But just say for purposes of discussion that he did. That would be an absolute boon for me. If the study that Wade and I prepared gets publicized — regardless of who gets the credit for it — it instantly becomes easier to tell the truth about stock investing at hundreds of different sites. So all of my stuff — I’ve developed a lot of it over the years — gets out. How does that hurt me? You always talk as if the key to getting credit is being smarter than other people. That’s not the reality here. Most Buy-and-Holders possess more than enough […]

Set forth below is the text of a comment that I recently posted to the discussion thread for another blog entry at this site: Uh oh, Rob. Bill Bengen points out the research and data that says you are wrong and that VII is a failure: “I have not studied in great detail the correlation between Shiller CAPE and withdrawal rate. However, Michael Kitces, a celebrated financial planner who has also done some important research in the area of withdrawal rates, produced an interesting chart some years ago. It showed a strong negative correlation between CAPE and each year’s safe withdrawal rates. So, I am not surprised at the conclusion that Wade reached, although I believe he may have been the first to quantify the “boost” to SAFEMAX by using a timing strategy. However, for those who wait for a low enough CAPE to invest fully in stocks, it has been a frustrating 25 years, as CAPE has been below its average of about 16 only about 25% of the time during that span (if that much). Today, of course, CAPE stands at more than twice its long-term average. It will be interesting to see if it does indeed “mean revert”, and even drop below its long term average. The only time that has happened in the last 25 years was for a few weeks in 2009. ” That last paragraph is power-packed stuff, Anonymous. I am grateful to you for sharing it with us. The claim that the last 25 years have been “frustrating” for Valuation-Informed Indexers is true only from the perspective of a Buy-and-Holder. Yes, if we have missed out on gains, then it could be viewed as frustrating. But the entire question in dispute is the question he puts on the table two sentences later when he questions whether prices will eventually mean revert or even drop below their long-term average. If that happens, the math shows that the Valuation-Informed Indexers will be far, far ahead of the Buy-and-Holders, too far ahead for the Buy-and-Holders to entertain any realistic expectations of ever catching up. Do I believe that prices are going to mean revert? 100 percent. I have never been more sure of anything in my life. Could I be wrong? 100 percent. I am one of those darn humans. We get them wrong all the time. All of us do. That includes me. We should […]

I’ve posted Entry #376 to my weekly Valuation-Informed Indexing column at the Value Walk site. It’s called How Many Bull/Bear Cycles Are Required to Prove That Valuations Matter? Juicy Excerpt: I sometimes make the claim that 100 percent of the evidence available to us today supports Shiller’s view of how stock investing works and 0 percent supports Fama’s view. I of course understand that the statement strikes most Buy-and-Holders as extreme and absurd. But I advance the claim sincerely. It’s that hill-and-valley graphic showing how valuations play out in the long term that persuades me that the case is so strong. The hill-and-valley graphic applies for the entire history of the stock market. And it is logically incompatible with a belief in Buy-and-Hold. A visitor to my website asked me the other day how many times the hill-and-valley pattern has played out. The answer is four times. We came to the end of one bull/bear cycle in the early years of the 20th Century. We came to the end of a second at the onset of the Great Depression. The third ended with the stagflation of the 1970s. And we are presumably nearing the end of the fourth bull/bear cycle in our nation’s history today. Four completions of the cycle was not enough evidence to make the case for my friend. He asked me to get back to him when I can say that the same basic cycle has played out not four times but thirty times. Related PostsValuation-Informed Indexing #270: A Critic of Valuation-Informed Indexing Offers a Concise Case for Why Buy-and-Hold Is SuperiorValuation-Informed Indexing #269: Eight Questions That Should Be Keeping Buy-and-Holders Up at NightValuation-Informed Indexing #260 : Shiller’s Ideas Should Be Treated as Mainstream IdeasValuation-Informed Indexing #267: Take Valuations Seriously and You Will Discover Things That You Were Not Initially Even Seeking to DiscoverValuation-Informed Indexing #258: It Is Critical to Distinguish Returns-Sequence Risk from Valuations Risk When Calculating Safe Withdrawal RatesValuation-Informed Indexing #259: Return Predictions Are Implicit in All Investing Advice

Set forth below is the text of a comment that I recently posted to the discussion thread for another blog entry at this site: Hi Rob. Come join us. Love, Robert, Wade, Bill and Michael We’ll all be working together in the days following the next price crash, Anonymous. The only difference is that there will be more human misery if we wait. I vote for us all pulling together today. But you know what? I only get one vote. Others get to decide what others do. So we will have to wait a bit to see how things play out. I naturally wish you all the best that this life has to offer a person. Rob Related Posts “We Will All Be in a Better Place When I Can Go to Any Discussion Board or Blog on the Internet and Post With 100 Percent Honesty and Not Have Any Concern Whatsoever That Intimidation Tactics Will Be Directed At Me. We All Do Our Best Work When We Feel Free to Follow Our Ideas Where They Lead Us As We Further Develop Them. I Want That for Everyone.”“I Have Raised the Possibility of an Amnesty for People Who Have Continued to Promote Buy-and-Hold Because They Once Truly Believed in it and Who Are Suffering Cognitive Dissonance re the Last 34 Years of Research Because It Is Just Too Hard for Them to Accept That They Got Something Wrong. But I Can’t Adopt an Amnesty By Myself. We Have to Get Congress Involved. We Need to Have a National Debate.”“After the Crash, the Floodgates Open. People Will Give Up Their Feelings of Embarrassment and Shame and Become Determined to Get Things Back on the Right Track. At That Point the Owners of the Bogleheads Forum Are Not Going to Be Resisting My Efforts to Take Over. They Are Gong to Be Asking Me to Take Over. We Are Going to Be Friends.”“If I Had the Power to Release You All of Your Prison Terms and Your Civil-Suit Liabilities and Your Various Embarrassments, I Would Do It In Two Seconds in Exchange for Your Willingness to Permit the National Debate That Thousands of Our Fellow Community Members Have Evidenced a Desire to See Proceed.”“Shiller Showed Us That It Is Primarily INVESTOR EMOTION That Determines Stock Prices, Not Economic Developments. So We All Need to Make a Switch to Talking Primarily About Investor […]

Set forth below is the text of a comment that I recently posted to the discussion thread for another blog entry at this site: http://www.aaii.com/journal/article/insights-on-using-the-withdrawal-rule-from-its-creator#comments Bengen is asked about and comments about Wade, Shiller, Michael Kitces, FIRECalc, CAPE. There’s even a link to one of Wade’s papers (sadly, not the one you wrote.) This is an active comment thread, so there’s no excuse for you not jumping in. But you don’t. How can you just sit on the sidelines? You say you have the most important job in the world. This is right in your freakin wheelhouse. If you stay silent now, then obviously nothing will ever rouse you from your hibernation. I’m grateful for the link, Anonymous. I have commented at hundreds of places. The problem is certainly not that I have not commented enough. We have a problem as a society. Shiller provided us the last piece of the stock investing puzzle in 1981. Had he published his “revolutionary” (his word) research findings in 1961, there never would have been any Buy-and-Hold. But it didn’t happen that way. By the time Shiller showed that valuations affect long-term returns, we already had an entire industry built around Buy-and-Hold. All of the powerful and wealthy people who were making their living promoting Buy-and-Hold did not want their clients and readers and friends to realize that they had made a mistake. So they kept quiet about the far-reaching implications of what Shiller had done. They praised him, they patted him on the head, they patronized him, down the road a piece they even awarded him a Nobel prize. But they didn’t change any of their strategic recommendations to reflect his research findings. And, as time passed, it became harder and harder for them to acknowledge their mistake and thereby bring the cover-up to an end. It’s now been 36 years. It’s now not just hard to admit the mistake, as it would have been in 1981. It’s now very, very, very, very hard. I did not cause any of this. I came along in 2002, when I saw that Greaney got the numbers wrong in his retirement study and told my friends at the Motley Fool’s Retire Early board. Hundreds of them saw right away how important that post was. They said that I had started the most important discussion ever held in that board’s history. Greaney threatened to kill family […]

Set forth below is the text of a comment that I recently posted to the discussion thread for another blog entry at this site: “But they have not emotionally taken in the knowledge that they possess so that they can make productive use of it. …The knowledge that they possess sits in their brains but they have not integrated it with their other thoughts” And don’t you think it’s a wee bit presumptuous to claim you know the inner working of the minds of thousands of people you’ve never met, many of whom you agree are far more intelligent and experienced than you are? I’m intelligent enough to see that there is no valuation adjustment in the retirement study posted at Greaney’s site, Anonymous. And I am intelligent enough to know that Shiller’s research showing that valuations affect long-term returns must be legitimate research or else he would mot have been awarded a Nobel prize for it. I am intelligent enough to know that there is no place for death threats in discussions of stock investing. And that there is no place for demands for unjustified board bannings. And that there is no place for thousands of acts of defamation. And that there is no place for threats to get an academic researcher fired from his job. If you have a better explanation for the events that we have seen transpire over the past 15 years, I would be happy to hear it. Neither you nor anyone else has even tried to put forward a better explanation. So, no, I don’t think it’s presumptuous at all. These events demand an explanation. And there is an explanation available in the psychological literature — cognitive dissonance. So that’s the one that I am going with until I hear something better. You don’t have to accept my explanation if you don’t care to. You asked me a question and I gave you an honest response. My explanation is 100 percent sincere. I am as intelligent as I am, no more and no less. And that’s what I have come up with at this point in the proceedings. I look for new insights every day. So perhaps down the road a bit I will be able to add some detail to it. My best wishes. Rob Related Posts“At the Very Bare Minimum, We Need to Make It a Practice to Tell Both Sides of […]

Set forth below is the text of a comment that I recently posted to the discussion thread for another blog entry at this site: “Stocks are today priced at two times fair value.” To be clear, this is a fact Wall Street is not aware of – otherwise they would immediately dump stocks. Is that fair to say? You are making a great point here, Anonymous. If you would reflect on this point a bit, the entire matter would click for you. Just about everybody on Wall Street is aware intellectually of what the P/E10 level is today. You see it mentioned all the time in articles. These people are obviously not dumb. So on an intellectual level, they know what they need to know. But they have not emotionally taken in the knowledge that they possess so that they can make productive use of it. They rationalize away this knowledge that they possess. They tell themselves “oh, nobody knows when the crash is coming and I cannot afford to miss out on gains in the meantime” or whatever. The knowledge that they possess sits in their brains but they have not integrated it with their other thoughts on all of the various strategic questions and so it is as if the knowledge did not exist. It is passive knowledge. It is not being put to productive use. It helps to remember what happened in the famous psychology experiment from the 1950s, the Asch experiment. People were put in a room and asked to identify which of two lines — a 12-inch line and an 18-inch line — were longer. Their brains possessed all the knowledge needed to supply the correct answer. It was obvious to them that the 18-inch line was longer. But the four people who were plants and who spoke before them all identified the 12-inch line as longer. This psychological reality neutralized the knowledge they possessed. Humans are social creatures. Evolution put something within us that tells us “don’t go against the tribe no matter what your brain tells you.” So they told the person conducting the experiment that they “thought” the 12-inch line was the longer one. Their emotions cancelled out the product of their mental processes. All of these people on Wall Street “know” what it means to say that stocks are priced at two times fair value, Anonymous. But their emotions — their […]

Set forth below is the text of a comment that I recently posted to the discussion thread for another blog entry at this site: Rob, It’s the same old thing, people think the party will never end. until it does. I have a friend who retired with $1million cash, his advisor told him to put it in the market in 2008. Well after a 60% loss he sold I guess anyone would. After this his advisor suggested going back in with the rest to “make his money back stocks, are cheap”. Well after all the dust settled he was left with $150,000. He cant go back to work and now he lives on SSI and depression. I myself have only 10% allocated to stocks now. Until you live through this or know someone who has you dont get it, the goons don’t because they cant be wrong. What really bothers me is the “common knowledge” that markets ALWAYS comes back? Really? all advisors say this, It is in all the financial articles on the web. I know I can’t remember the dates, but 7, 15, 20 years to recover. in the past,I for one do not want to sit and wait in fear hoping the market will come back for the rest of my life. Thank you for working so hard to get the word out, some of us get it Rob. Am I trying to get the word out or am I trying to learn myself? I think that the bottom line here is that I am trying to learn myself. There’s a message that I push. But, when you boil it all down, that message is: “Not one of us knows as much as he thinks he does, so we should all be willing to hear the other fellow out and learn what we can from someone coming at things from a different perspective.” That’s a process that serves us well in our efforts to learn in all other fields of human endeavor and it seems to me, that given how important investing is, it makes sense for us to apply the same learning process there that works in every other other field of human endeavor. Thanks for stopping by, Max. Non-Dogmatic Rob Related Posts“Part of the Job is to Describe the Pressures that Caused so Many Generally Good and Smart People Either to Participate in the Cover-Up […]

Set forth below is the text of a comment that I recently posted to the discussion thread for another blog entry at this site: “It’s his abusiveness.” Really? Here are just a few of your quotes from those pesky Post Archives. “The “4 percent rule” has caused millions of busted retirements” “When you calculate the SWR accurately, you find that the withdrawal rate that is described in the Old School studied as “100 percent safe” has only a one in three chance of working out for those who retired at the top of the bubble. That means that there are going to be millions of busted retirements resulting from just this one error” “I think the Old School safe withdrawal rate studies caused millions of busted retirements by getting the numbers so wildly wrong.” “There are going to be millions of busted retirements resulting from the demonstrably false claims put forward in the Old School safe-withdrawal rates studies.” There’s no conflict between those statements and what I am saying here. The 4 percent rule will have caused millions of failed retirements in the days following the next crash (we obviously will not have any problem if it turns out that the last 36 years of peer-reviewed research is not legitimate research). Who is responsible for those millions of failed retirements? If it was all a mistake, no one was responsible. If it all was a mistake, then we all just have to be careful not to repeat the mistake. But that’s not the situation that we are dealing with. I pointed out the mistake in a post that I put to the Retire Early board at the Motley Fool site on the morning of May 13, 2002. Thousands of our fellow community members expressed excitement over the post, saying that they saw it as the most valuable post in the history of the board. Big-name experts like Rob Arnott endorsed the post, saying it checks out with what the last 36 years of peer-reviewed research says in every way and that it opens up the way to hundreds of big advances in our understanding of how stock investing works. A fellow with a Ph.D. in Economic saw how excited people were over the things they were learning in the debate that followed the post asked me if I would be willing to co-author research showing that this post led us […]

Set forth below is the text of a comment that I recently posted to the discussion thread for another blog entry at this site: “I believe that Greaney has caused millions of failed retirements.” Exactly how? You’re still waffling on that. If it’s his 4% rule you should forget about nobody Greaney and focus on famous Bengen, who says 4.5%. If Greaney busted millions of retirements, Bengen certainly busted billions. If it’s Greaney’s abusiveness, how does his abuse bust the retirements of millions of people who never heard of either of you? It’s his abusiveness. Greaney didn’t come up with the 4 percent rule. He is not responsible for the intellectual mistake. I don’t think it would be fair to blame the people (like Bengen) who ARE responsible for the intellectual mistake for the millions of failed retirements. People made mistakes. That’s just one of those things. There is no evidence that the mistake was intentional, that the aim was to cause millions of failed retirements. So I don’t see that there is any blame to cast there. Greaney’s abusiveness IS intentional. That’s why I cast blame on him in a way that I do not cast blame on Bengen or lots of others. You suggest that Greaney’s abusiveness has not hurt the millions of people who have never heard of him or me. I disagree. I built the Retire Early board at Motley Fool into the #1 discussion board at that site with a purpose in mind — I wanted to teach millions of people how to achieve financial independence early in life. It was my intent to spread the word about what we learned about safe withdrawal rates to everyone on the planet. Greaney blocked that process from moving forward with his criminally abusive behavior. Wade Pfau and I intended to work together to get our grounds-breaking study showing that Valuation-Informed Indexing is superior to Buy-and-Hold featured on the front page of the New York Times. Greaney stopped that from happening by threatening to get Wade fired from his job if he continued doing honest work in this field. He destroyed millions of middle-class lives with that criminal act. Has anyone ever been more deserving of a long prison sentence? Valuation-Informed Indexing is a pure good. It’s all upside and zero downside. And millions of middle-class people who very much need access to honest and informed reports of […]

Set forth below is the text of a comment that I recently posted to the discussion thread for another blog entry at this site: Just because you were able to browbeat Wade into emailing the Trinity guys doesn’t mean I’ll do your bidding too. Set up your own damn forum. But I promise I’ll read the historical transcript. Okay. Related PostsGoon Poster to Rob: “You Have Stated What You Think Are Problems. People Have Responded As to How They Disagree. People Eventually Got Angry Because of Repetitive Comments Going in Circles.”“Part of the Job is to Describe the Pressures that Caused so Many Generally Good and Smart People Either to Participate in the Cover-Up or at the Minimum Tolerate It. I Post These Goon Conversation Blog Entries to Help People Come to a Full Understanding of What Happened.”“Wade Pfau Never Wrote Any Words of That Nature Until You Threatened to Send Defamatory E-Mails to His Employer. Words That Are Said As the Result of Intimidation Tactics Don’t Count. Wade Said What He Really Believes About Safe Withdrawal Rates and About Valuation-Informed Indexing and About Me in Hundreds of E-Mails That He Exchanged With Me, Many of Which I Have Reported on at My Site.”Rob Bennett to Wade Pfau: “It is 100 Percent Wrong That People Posting at Bogleheads Feel Intimdated re Posting My Name…. By Using My Name, You Help Others Get Over Their Feelings of Intimidation”“After the Crash, the Floodgates Open. People Will Give Up Their Feelings of Embarrassment and Shame and Become Determined to Get Things Back on the Right Track. At That Point the Owners of the Bogleheads Forum Are Not Going to Be Resisting My Efforts to Take Over. They Are Gong to Be Asking Me to Take Over. We Are Going to Be Friends.”Buy-and-Hold Goon to Rob: We Have Only Your Word That Wade Ever Said That, or Ever Even Mentioned VII By Name. He Certainly Says Nothing of the Kind Today. In Fact, To You, He Says Nothing At All.”

Set forth below is the text of a comment that I recently put to the discussion thread for another blog entry at this site: “I think Bengen is wrong. I think that I have a responsibility to say so.” And so you do. Here, behind his back. But you won’t express your math-free gut-feel opinion in a comment section where he might see it. How is that living up to your responsibility? No. I engaged in an e-mail conversation with Bengen a number of years back. I told him that I think he is wrong re safe withdrawal rates. Set up a debate at the Bogleheads Forum. We can have Bengen there. We can have me there. We can have Bogle there. We can have Shiller there. We can have Greaney there. We can have Linduaer there. We can have Pfau there. See how it goes. No death threats. No demands for unjustified board bannings. No thousands of acts of defamation. No threats to get academic researchers fired from their jobs. We’ll make history. Rob Related PostsGoon Poster to Rob: “You Have Stated What You Think Are Problems. People Have Responded As to How They Disagree. People Eventually Got Angry Because of Repetitive Comments Going in Circles.”“We Should Be Asking Bogle Where He Got That Number If He Did Not in Fact Pull It Out of His Backside. Since He’s Available at the Bogleheads Forum and Appears at the Annual Meeting, That’s the Perfect Place to Put Him on the Hot Seat.”Buy-and-Hold Goon to Rob: “I and Many Others Are Confident in Buy–Hold-and-Rebalance. You Seem to Be the Only One Confident in Valuation-Informed Indexing.”Goon Poster at Value Walk Site: “All One Needs to Do Is Read Your Posts and See That the Vast Majority of Your Posts Include Complaints About What You Think of Shiller, Bogle, Pfau and Others. You Want to Talk About Taking People Down, Down, Down. Just Read Your Own Posts.”“Most People Who Agree With Shiller Hold Back From Exploring All the Implications of His Ideas Publicly. That’s Why Valuation-Informed Indexing Has Only Won Over 20 Percent of the Population in 34 Years. I Want It to Win Over 100 Percent of the Population. So I Say Things in the Way in Which They Must Be Said for Us to Get to 100 Percent.”“It’s ALL a Guide. But You Buy-and-Hold Goons Don’t ACT Like It’s All a […]

Set forth below is the text of a comment that I recently posted to the discussion thread for another blog entry at this site: It makes perfect sense. You despise Greaney. You just won’t say that, so you blindly attack his work. Do you know how many Google hits there are out there for “rob bennett” “millions of busted retirements”? Lots. And the cause of all those busted retirements? The 4% rule. Now, magically, you have no problem with it. 4%, 4.5%, whatever, it’s all good, let’s just get along. Today you say “Greaney has destroyed millions of middle-class lives with his insanely abusive behavior.” Which is absurd, but it clearly shows your problem with him is personal. Until someone says it’s personal. Then the problem is back to the 4% rule. I don’t despise John as a person even a tiny bit. I had a lot of good times with the guy. I never would have had those times if he had not started that Retire Early board. When I was starting work on the book that became “Passion Saving,” I asked John to be my co-author. Why would I do that if I despised him? This claim makes no sense. And it’s not right to say that I blindly attack his work. I reviewed his retirement study when he published it as a report at the Soapbox.com site. I gave it a five-star review. I felt a little funny about doing that because I knew at the time (but had not come out publicly and said so) that he got the numbers wrong in his study. I rationalized what I did on grounds that his study was a significant advance on the retirement literature that was in place before he came on the scene. I still believe that to be the case. Peter Lynch was the manager of the Magellan fund. He was a pretty big deal. Lynch said that the safe withdrawal rate was 7 percent. Greaney said it was 4 percent. Greaney was a lot closer to the mark than Lynch was. Not bad for a guy whose only qualifications to write about the subject were that he (like me) had figured out how to get his words posted to an internet site. So I like the guy as a person and I admire his work. But, yes, you are right that I believe that Greaney […]